- Strong Net Sales growth of 5.8% LFL
in Q3
- All four business segments
contributing
- Over-proportional increase in
Recurring EBITDA of 8.1% LFL in Q3
- SG&A cost savings program
delivering results ahead of target
Regulatory News:
LafargeHolcim (Paris:LHN):
Group Q3 2018 Q3 20172
±% ±% LfL Net Sales of cement
4,707 4,628 1.7 6.5 Net Sales of aggregates
1,175 1,120 4.9 6.0 Net Sales of
ready-mix concrete 1,454 1,408 3.3 3.8
Net Sales of Solutions & Products 737 694
6.2 5.6
Net Sales1
7,362 7,175 2.6 5.8 Recurring EBITDA
1,867 1,774 5.2 8.1
All figures expressed in millions CHF.
Jan Jenisch, CEO: “In Q3 we were able to increase our positive
momentum and to continue delivering on our Strategy 2022 –
'Building for Growth'. Despite headwinds from steep cost inflation,
we delivered stronger Net Sales and our earnings grew even faster.
I am very satisfied with our growth in volumes, our solid pricing
and the impact of our cost and efficiency programs. We are
executing at full speed on our Strategy 2022 – 'Building for
Growth'.”
PERFORMANCE OVERVIEW
Like-for-like Net Sales grew by 5.8 percent for the third
quarter and by 5.1 percent in the first nine months of 2018
compared to the prior-year period. Growth was driven by increased
demand as well as sales price increases. All four business segments
contributed to the Net Sales increase.
1 Net Sales shown after eliminations.2 Net Sales Q3 2017
restated by CHF 231m due to the reporting of Gross Sales from
trading activities, following the application of the IFRS 15,
effective 1 January 2018. This had no impact on Recurring EBITDA.
Recurring EBITDA Q3 2017 restated by CHF 24m due to the
reclassification of the Group share of net income of Huaxin to
joint ventures.
Recurring EBITDA grew over-proportionally by a very strong 8.1
percent in Q3 compared to the prior-year period on a like-for-like
basis, demonstrating strong momentum. Steep cost inflation in
energy and logistics was more than offset by the company’s volume
growth as well as the effectiveness of its pricing and efficiency
programs.
The North America region delivered a robust contribution
supported by favorable market conditions and successful commercial
initiatives. Results from the Latin America region were lower in Q3
2018 compared to the very strong performance in the prior-year
period, impacted by weakening demand in several countries. The
Europe region delivered positive results overall, with continued
good momentum from most key markets. The Middle East Africa region
showed signs of stabilization in key markets. The Asia Pacific
region had another strong quarter, supported by contributions from
China and India as well as improved performance in South East
Asia.
STRATEGY 2022
The execution of Strategy 2022 – “Building for Growth” is at
full speed and well on track on all four value drivers: Growth,
Simplification & Performance, Financial Strength and Vision
& People.
On Growth: to date four bolt-on acquisitions have already been
completed in highly attractive markets, the most recent being the
acquisition of Denver (US)-based ready-mix concrete manufacturer
Metro Mix in August. The July 2018 acquisition of the Vritz sandpit
(FR) helps secure reserves in a well-positioned market for the next
three decades. The business segments Aggregates and Ready-Mix
Concrete achieved improved margins, a significant step in the
implementation of the company’s Strategy 2022 – “Building for
Growth”.
On Simplification & Performance: with the successful
implementation of a new operating model based on a corporate-light
structure and simple reporting lines, the company has achieved
significant progress in its CHF 400 million SG&A savings
program. The execution of this program is ahead of plan and has
started to deliver results in Q3. The corporate offices in
Singapore and Miami have been closed and the Zurich and Paris
offices will be closed within Q1 2019.
On Financial Strength: since June 2018, more than CHF 1.3
billion has been successfully refinanced at attractive terms
leading to an improved debt maturity profile and a decrease in
financing costs. Progress towards the divestment target of CHF 2
billion has been made.
OUTLOOK
The accelerated sales growth and over-proportional increase in
Recurring EBITDA demonstrates the strength of Strategy 2022 –
“Building for Growth”. This positive momentum is expected to
continue in Q4 with the following underlying market trends:
- Continued growth in North America
- Softer cement demand in Latin
America
- Strong markets in Europe
- Challenging but stabilizing conditions
in Middle East Africa
- Continued demand growth in Asia
Based on the above trends and positive momentum, the Net Sales
guidance for 2018 is adjusted upwards to 4 to 6 percent on a
like-for-like basis (compared to 3 to 5 percent as previously
guided).
While continued headwinds from cost inflation remain
challenging, the volume growth, solid pricing and efficiency
programs are expected to result in further growth in Recurring
EBITDA in Q4. The Recurring EBITDA growth guidance for 2018 is
adjusted to 3 to 5 percent on a like-for-like basis.
GROUP AND REGIONAL
FIGURES
Group Q3 2018 Q3 2017
±% ±% LfL 9M 2018 9M
2017 ±% ±% LfL Sales of
cement(million tonnes) 57.2 56.2 1.9
5.1 165.4 163.8 1.0 4.6 Sales of
aggregates(million tonnes) 80.0 80.1 -0.1
3.0 205.3 208.1 -1.4 1.5 Sales
of ready-mix concrete(million m3) 13.5 13.3
1.2 1.1 38.0 37.7 0.9 1.3 Net
Sales(million CHF) 7,362 7,175 2.6 5.8
20,634 20,093 2.7 5.1 Recurring
EBITDA(million CHF) 1,867 1,774 5.2 8.1
4,351 4,356 -0.1 2.5
Asia Pacific
Q3 2018 Q3 2017 ±%
±% LfL 9M 2018 9M 2017
±% ±% LfL Sales of cement(million tonnes)
21.1 21.6 -2.3 5.7 66.6
68.2 -2.4 5.3 Sales of aggregates(million tonnes)
7.8 8.1 -4.1 -4.1 23.6
23.7 -0.5 -0.5 Sales of ready-mix concrete(million
m3) 3.2 3.4 -5.4 -5.4 9.3
9.5 -1.8 -1.4 Net Sales(million CHF) 1,770
1,787 -0.9 7.0 5,576 5,463
2.1 8.6 Recurring EBITDA(million CHF) 378
308 22.7 35.0 1,151 1,000
15.1 22.6
Europe Q3 2018 Q3 2017
±% ±% LfL 9M 2018
9M 2017 ±% ±% LfL Sales of
cement(million tonnes) 12.6 12.1 3.8
3.8 33.9 32.3 4.9 4.9 Sales of
aggregates(million tonnes) 32.0 33.9 -5.7
1.1 91.0 93.9 -3.1 2.8 Sales of
ready-mix concrete(million m3) 5.0 4.6 9.9
8.8 14.3 13.5 6.2 5.4 Net
Sales(million CHF) 2,027 1,883 7.7 6.9
5,692 5,209 9.3 4.6 Recurring
EBITDA(million CHF) 480 450 6.6 4.4
1,079 1,000 7.9 2.7
Latin America
Q3 2018 Q3 2017 ±%
±% LfL 9M 2018 9M 2017
±% ±% LfL Sales of cement(million tonnes)
6.3 6.7 -5.1 -3.6 18.9
18.5 2.4 6.3 Sales of aggregates(million tonnes)
1.0 1.0 -4.4 6.7 2.7 3.3
-19.0 -1.5 Sales of ready-mix concrete(million m3)
1.4 1.4 -3.7 4.4 4.2 4.4
-5.7 11.8 Net Sales(million CHF) 698
746 -6.5 7.8 2,126 2,205 -3.6
11.1 Recurring EBITDA(million CHF) 251 288
-13.0 -5.5 739 785 -5.8
1.2
Middle
East Africa Q3 2018 Q3 2017
±% ±% LfL 9M 2018 9M
2017 ±% ±% LfL Sales of
cement(million tonnes) 9.2 8.8 5.1 5.1
26.9 26.9 0.0 0.0 Sales of
aggregates(million tonnes) 2.6 2.7 -5.8
-5.8 6.7 8.0 -16.3 -16.3 Sales of
ready-mix concrete(million m3) 1.1 1.1 1.2
1.2 3.1 3.6 -13.6 -13.6 Net
Sales(million CHF) 772 803 -3.8 -1.3
2,306 2,541 -9.2 -5.5 Recurring
EBITDA(million CHF) 200 232 -13.6 -9.8
566 824 -31.3 -26.9
North America
Q3 2018 Q3 2017 ±%
±% LfL 9M 2018 9M 2017
±% ±% LfL Sales of cement(million tonnes)
6.1 5.9 4.0 4.0 14.9 14.4
3.7 3.7 Sales of aggregates(million tonnes)
36.8 34.4 6.9 6.9 81.3 79.2
2.7 2.7 Sales of ready-mix concrete(million m3)
2.8 2.9 -2.5 -5.0 7.2 6.7
6.1 -1.1 Net Sales(million CHF) 1,891
1,790 5.6 4.7 4,366 4,194 4.1
3.3 Recurring EBITDA(million CHF) 643 621
3.5 2.9 1,113 1,093 1.8
2.5
ADDITIONAL INFORMATION
Non-GAAP definitions
Some non-GAAP measures are used in this release to help describe
the performance of LafargeHolcim. A full set of these non-GAAP
definitions can be found on our website.
Analyst presentation
The analyst presentation of the third quarter update is
available on our website at www.lafargeholcim.com
Media call: 09:00 CET
Switzerland: +41 58 310 5000
France: +33 1 7091 8706
UK: +44 207 107 0613
US: +1 631 570 5613
Analyst call: 10:00 CET
Switzerland: +41 58 310 5000
ABOUT LAFARGEHOLCIM
LafargeHolcim operates four businesses segments: Cement,
Aggregates, Ready-Mix Concrete and Solutions & Products, which
includes precast concrete, asphalt, mortar and building solutions.
LafargeHolcim's broad portfolio is focused on solving the toughest
challenges that masons, builders, architects and engineers face,
from urbanization to population growth and the demand for
affordable housing. Headquartered in Switzerland, LafargeHolcim
holds leading positions in all regions across the globe. It employs
approximately 80,000 employees in around 80 countries and has a
portfolio that is equally balanced between developing and mature
markets. More information is available on
www.lafargeholcim.com
Important disclaimer - forward-looking statements:
This document contains forward-looking statements. Such
forward-looking statements do not constitute forecasts regarding
results or any other performance indicator, but rather trends or
targets, as the case may be, including with respect to plans,
initiatives, events, products, solutions and services, their
development and potential. Although LafargeHolcim believes that the
expectations reflected in such forward-looking statements are based
on reasonable assumptions as at the time of publishing this
document, investors are cautioned that these statements are not
guarantees of future performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are difficult to
predict and generally beyond the control of LafargeHolcim,
including but not limited to the risks described in the
LafargeHolcim's annual report available on its website
(www.lafargeholcim.com) and uncertainties related to the market
conditions and the implementation of our plans. Accordingly, we
caution you against relying on forward-looking statements.
LafargeHolcim does not undertake to provide updates of these
forward-looking statements.
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